Confidential Wal-Mart Memo Prompts Widespread Criticism

For Immediate Release
Thursday, October 27, 2005

Washington, D.C., October 27, 2005 – Yesterday’s New York Times report on a confidential Wal-Mart memo, obtained by Wal-Mart Watch, prompted widespread criticism and brought added scrutiny to Wal-Mart’s inadequate employee health care plan. Below are excerpts from some of the coverage:

CNN’s Situation Room: “They Have An Online Team Aggressively Putting This Information Out There”
Reporter Wolf Blitzer: News we're following. It's a private document that probably wasn't meant for public eyes. In an internal memo, Wal-Mart suggests ways to cut employee benefit costs. But some of the suggestions are stirring up lots of criticism.
Reporter Mary Snow: Well, Wolf, this was supposed to be a private document. Now Wal-Mart is coming under the microscope for changes it's proposing to healthcare benefits for its 1.2 million workers. Now, those changes were outlined in an internal memo that was obtained about a group called Wal-Mart Watch. It's highly critical of Wal-Mart, saying its benefits and wages are too low. Now, Wal-Mart confirms the memo is authentic…
Reporter Abbi Tatton: Well, Wolf, that once- private memo is now very easily available online… And if you look, you can see the concerns that Wal-Mart has about its public reputation. It cites specifically that group Wal-Mart Watch that you can find at WalMartWatch.com. They have the earlier draft version of the memo there that is downloadable at that site. This is a group that was started earlier this year with funding from some union money, also from non-profits and private individuals, to highlight to the public what it perceives are the problems with Wal-Mart. And they have an online team aggressively putting this information out there. There's online petitions and also downloadable information, for example, about possible sermon topics about this.

Wall Street Journal: “Can Employers Alter Hiring Policies to Cut Health Care Costs?”
"When you add physical requirements to jobs that don't need them, you begin to weed out a whole pool of people such as the elderly, the obese, people with pre-existing medical conditions," says Andrew Stern, president of the Service Employees International Union, which represents 1.8 million workers, including health-care workers, janitors and security guards. "I think this memo steps over the line of what's legal," he adds.

NPR’s All Things Considered: “Health Care Memo Further Tarnishes Wal-Mart”
Reporter Chris Arnold: But many Wal-Mart executives must be groaning today about the release of this memo.
Professor Paul Argenti: The way it's going to look is just going to be miserable for them.
Reporter Chris Arnold: Paul Argenti is a business professor at Dartmouth who consults on corporate communications. Argenti says Wal-Mart, after years of seeming not to care much about PR, has more recently been spending a lot of money on its image. In fact, the memo itself is filled with concerns and strategies about how to address Wal-Mart's critics.

Los Angeles Times: “Wal-Mart’s Memo Blurs Its Message On Benefits”
The benefit memo, however, may undercut the corporate image that Wal-Mart has sought to promote through its television commercials and public relations efforts… "The company story is that the workforce is everything," said David West, executive director of the Center for a Changing Workforce, a Seattle think tank that has studied Wal-Mart's benefits. In TV ads, "it's 'Our people make the difference.' But, if you read this memo, their people aren't making the difference. It's time to get a new, younger workforce that doesn't go see the doctor."… Benefit experts also said that Wal-Mart was partially to blame for its rising healthcare bill because expensive health plans discourage healthy workers from participating.

USA Today: “Wal-Mart Memo Sparks Criticism”
The 27-page memo's release to The New York Times by a labor union-backed group came two days after CEO Lee Scott announced new, lower-premium health plans to make insurance more affordable to employees… The memo said many Wal-Mart workers pay a substantial portion of their incomes for health benefits: "On average, associates spend 8% of their income on health care for themselves and their families, nearly twice the national average." Five percent are on government programs such as Medicaid, compared with 4% at other national employers, it said.

The New Republic: “Wal-Mart Still Doesn’t Get It”
[Wal-Mart CEO] Lee Scott would like Wal-Mart employees--and, more importantly, increasingly skeptical consumers--to believe that his company has finally gone straight. But in an amazing feat of bad timing, Scott's speech was followed closely by a leaked memo that put the lie to much of his new-leaf rhetoric…The best evidence of Wal-Mart's departure from reality, though, comes at the end, in the memo's proposed "communication" efforts. The problem, it seems to say, isn't that Wal-Mart provides sewer-grade benefits. The problem is that its mendacious critics have been allowed to frame the debate in their favor. "Clarify and improve messages about our healthcare offering," it recommends. "This kind of communication will help us reframe public perception of our healthcare offering, the only way for us to start winning the debate." The only? There's also the option of actually making substantive, pro-employee changes. But apparently that wouldn't be true to Sam Walton's legacy.

American Public Media’s Marketplace: “Wal-Mart’s Unsettling Benefits Memo”
So here’s a question: Why do high level corporate executives write anything down anymore? Much less draft a 27-page memorandum on a business practice they have been heavily criticized about, that then shows up in the New York Times. The company is Wal-Mart, the issue of the day is health care…Chambers’ memo emphasizes its importance to preserve or enhance Wal-Mart’s reputation. The company’s critics call this publicity a big black eye…Wal-Mart did not return several phone calls seeking comment.

The Independent (UK): “Fat? Over 40? Don’t Bother Applying for a Wal-Mart Job”
If you are on the wrong side of 40 and not as fit as you'd like to be, don't bother applying for a job at Wal-Mart. That is the message for workers in America - revealed in a secret memo, laying out a plan by Wal-Mart to make it harder for older, less healthy people to get a job at one of its legions of stores in the US… However, Wal-Mart's critics believe the company was revealing its true colours. Andrew Grossman, director of Wal-Mart Watch, the advocacy group that received the document anonymously, said: "This company has been selling a false image of itself to the general public. Anyone who truly wishes to understand Wal-Mart need look no further than this document. We thank the good person or persons inside the Wal-Mart company who bravely shared this with us."

Fort Smith, Ark. ABC affiliate KHBS: “Memo Sheds Light On Wal-Mart Intentions”
Reporter Craig Cannon: One group is using the information to criticize them massive retailer.. An internal memo sheds light on how Wal-Mart is trying to save money, while keeping its employees, and you, happy all at the same time. Critics though aren’t buying Wal-Mart’s plans…Wal-Mart critics like Wal-Mart Watch, out of DC, say that some of these steps seem helpful to employees, but its just Wal-Mart’s way of avoiding the search for a better health care plan.
Wal-Mart Watch Executive Director Andrew Grossman: Wal-Mart could very easily afford to pick up a good health care package for all of their employees, and more importantly, Wal-Mart, which is a leader in so many ways, could lead on the health insurance issue nationally. Wal-Mart should use its market power to bring about real change in a health care system that’s clearly bad.

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